Housing confidence up among builders, but is it a fluke?

Builder confidence has reached a new high of 52, according to the Housing Market Index, released Monday by the National Association of Home Builders and Wells Fargo. This is the first time since 2006 that numbers have been so high.

“Housing leads us into a recession and housing leads us out of a recession.”

Some factors may impede this growth, he said, such as high interest rates. Also, builder motivation may soften if the cost of building a home increases but home prices do not.

Home prices are rising 12 percent from year to year, but fewer people own a home today than did one year ago.

In 2012 there was in increase in home construction in Utah, according to James Wood with the David Eccles School of Business. The market is split into the detached single family home, which the NAHB report measures, and multifamily homes such as apartments and condos. Although single family homes are seeing a recovery, the multifamily sector has been slow to respond to changes in the economy. Even the single family market has not seen the gains he anticipated, he said.

Projections indicate 15,000 units will be built in Utah this year, he said. This is up from the 11,000 built last year, but less than half of the 28,000 units built in 2005.

Building permits issued for single-family homes in Utah were up 2 percent so far this year, he said, which is not far above last year's numbers. In 2012, building permits were up by 40 percent statewide. This is according to data cities and counties provided to the Bureau of Economic and Business Research. Projections indicate a 10 percent to 15 percent increase by the end of the year.

"We're moving in the right direction, but we're not quite as strong as I thought we would be," Wood said.

Monday's report accurately reflects what Paul Peterson said he has seen in the Utah housing market. As executive officer of the Salt Lake Home Builders Association, he said he has heard positive feedback from builders. Their main concerns have dealt with keeping up with the demand for new homes, including having enough workers and available land.

At some point demand will level out, he said, and the market should see steady growth in home building.